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Karm Farrugia draws parallels between Malta and South Africa
President Mbeki recently committed his administration to achieving nine specific goals, most of which incidentally are equally applicable to us in Malta. But only if for once the Government and Opposition were to agree to put the country’s interest before their own parties.’ At least until we manage to equilibrate the economy and pitch it at an acceptable high level of performance, instead of allowing the critical next few years of adjustment to sink us further into the current stagnation syndrome we seem unable to escape from. Except, perhaps, for pious declarations of optimistic determination characteristically associated with a change in leadership.
Mbeki’s goals, now put to the test of a general election, are: reducing poverty; developing the ‘greatest resource’: people; improving the quality of life for all; intensifying action to achieve social equity; increasing economic development and growth; improving government efficiency; strengthening the system of democratic governance; discharging the country’s international obligations; and strengthening links with the ‘masses.’
An MSc(Econ) graduate from Sussex University in 1966, 62-year old Mbeki last week faced the electorate as leader for the second time after convincingly winning the previous election in 1999 with a 266 seat majority in a National Assembly of 400 deputies. By the time this column goes to print, the full results should already be known. Most people would be surprised and shocked if he is not given a further mandate, despite harsh criticism that he has not done enough for the poor, the unemployed, the sick and the underprivileged.
Building 1.5 million homes in less than a decade still leaves about 5.5 million homeless. Unemployment remains stubbornly high, officially still over 20 percent, but much higher if expanded to include those who do not bother to register for employment. For historical reasons, the South African workforce is under-skilled and under-educated, especially in an economy increasingly driven by services and technology and decreasingly by the traditional mining and manufacturing industries. A third of the labour force is unionised, placing the country in about the middle of global rankings.
Such is the extent of the social problem, not forgetting the looming spectre of HIV/AIDS estimated to have infected more than five million South Africans.
And yet the nation’s budget deficit has been kept at under two percent of GDP in a growth path averaging 2.2 percent after accounting for inflation, already down to below five percent from previously perennial two-digit figures. The country’s total national debt remains below 45 percent of GDP, of which, though, almost two-thirds is foreign owned, albeit reducing.
Sound economic management, indeed, considering South Africa’s high vulnerability to external influences which, at one point three years ago, plunged the Rand 40 percent down in its value against the US dollar for no logical reason. When the world realised the solid basics in the government’s economic policies, it not only pushed the Rand back to its previous level, but even higher. For how long? Hard to tell.
That’s where sensible economic management comes into play. In Malta we have a lot to learn in this area of governance. Why on earth did we allow our national debt, conservatively calculated, to recklessly overrun the 60 percent of GDP limit and reach even 72 percent? And our annual fiscal deficit to exceed thrice the tolerated maximum of 3 percent? All in a span of a mere 15 years from a starting point of below 20 percent and 1.5 percent respectively. Simply, the curse of winning votes at all costs. The greed for power. That’s politicians for you.
Today in Malta we have reached a stage when we could usefully adopt President Mbeki’s clarion call and direct it to all of us, particularly to trade unions and high-income earners. The former must offer to sacrifice a few of their minor ‘acquisitions’ wrenched over the years from successive appeasing administrations; the latter must accept a modest adjustment in their lifestyle which was allowed to rise well above what the country could afford from its production and consequently financed from borrowing.
Unless we want to have changes forced on us by the EU or, God forbid, by institutions like the IMF or World Bank, I am afraid there is no other way left for us to combat the inevitable adjustment pain that has already begun to be felt from the restructuring process which, sadly but fortuitously, was underestimated in its intensity during the long-drawn-out campaign towards EU membership. In hindsight one can now lament the senseless political divide on such a vital issue which, as a by-product, pushed the economy down on its knees begging urgently for a social pact that would, in the words of our new President and ex-Premier, “assure that we get the best out of our human resources.”
Exactly as the South African president put it. Both presidents condemn short-term solutions. However, while Fenech Adami still pleads for an end to ‘confrontations and divisions’ between the three social partners, Mbeki calls for a ‘lending hand’ from everyone. A negative and a positive approach respectively. Which is the better? You don’t need to reply. I already know the answer.
Personal Note: My year-old offer of gratuitous assistance to our Foreign Office in its relations with South Africa has remained unanswered. I doubt if it was ever brought to the Minister’s attention.
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